Mutual Fund Schemes
(i) Open ended scheme
A scheme, which offers units for sale without specifying any duration for redemption.' An investor can buy and sell units on a daily basis. The scheme has a perpetual existence and a flexible, ever changing corpus. The investors are free to buy and sell any number of units at any point of time, at prices that are linked to the NAV of the units. In some schemes, there could be initial lock in period. Every fund announces buy and sell values and NAV figures on a daily/weekly/monthly (at least once a week) basis.
(ii) Close ended schemes
A scheme in which the subscription period for the mutual fund remains opens only for a specific period. At the end of duration of scheme, entire corpus is disinvested and the proceeds distributed to the unit holders. After the final distribution the schemes ceases to exist. Every close-ended scheme shall be listed in a recognized stock exchange within six months from the closure of the subscription. However, listing of close ended scheme shall not be mandatory, if the said scheme provides for periodic repurchase facility to all the unit holders with restriction or if the said scheme provides for monthly income or caters to special classes of persons like senior citizens, women, children, widows etc. providing for repurchase of units at regular intervals; or if the said scheme opens for repurchase within' a period of six months from the closure of subscription. The asset management company may at its option repurchase or reissue the repurchased units of a close-ended scheme. The units of close-ended scheme may be converted into open-ended scheme, if the offer document of such scheme discloses the option and the period of such conversion; or the unit holders are provided with an option to redeem their units in full.
(iii) Load Funds and no Load Funds
A mutual fund can recover the initial marketing expenses (loads). If the load is charged at the time of entry into the fund it is called front end or entry load. Back end or exit load is charged at the time of exit. If the load amount is charged to the scheme over a specified period, it is called as deferred load. SEBI has fixed the maximum amount of load that could be charged by the fund managers. In no load funds, fund will not charge any sales expenses.
(iv) Growth Funds
There aim is to generate long-term capital appreciation for the investors. The objective is achieved by investing a substantial portion of the fund in the equity related instruments.
(v) Income Funds
They are also called as debt funds. There aim is to generate and distribute regular income to the investors. The aim is achieved by investing substantial portion of the corpus in high-income yield/fixed income yield income instruments.
(vi) Balanced Funds
These funds aim to provide regular income as well as capital appreciation to its investors by balancing the investments of the corpus between the high growth equity shares and fixed income earning securities.
(vii) Tax savings funds
These schemes are basically growth schemes, which also offer rebates to investors under the income tax act.
(viii) Guaranteed Return Funds
No guaranteed return shall be provided in a scheme,
(a) Unless such returns are fully guaranteed by the sponsor or the asset management-company.
(b) Unless a statement indicating the name of the person who will guarantee the return, is made in the offer document;
(c) The manner in which the guarantee to be met has been stated in the offer document.
Help with Mutual Fund Schemes Assignments - Homework
We at Expertsmind.com offers help with assignments - homework covering all financial management topics including Mutual Fund Schemes, Open ended scheme, Close ended schemes, Load Funds and no Load Funds, Growth Funds, Income Funds, Balanced Funds, Tax savings funds, Guaranteed Return Funds and many more. We offer email based assignment help service with best quality maintained with 100% plagiarism free. The students who feel trouble in financial management subject or Mutual Fund Schemes topic, they can approach with live experts anytime from anywhere.